Disney Launches MovieBeam On-Demand Video Service

BURBANK, CALIF.— The Walt Disney Company's Buena Vista Datacasting unit launched a new near video-on-demand service that will make available up to 100 movies at a time on a hard drive-enabled set-top box that will be distributed to consumers homes on a monthly lease basis.

The service, which is called "MovieBeam," will send movies to set-top boxes in consumers' homes by transmitting the content in digital MPEG-2 form within the bandwidth of the analog broadcast channels of ABC owned-and-operated stations and PBS affiliate stations.

"This will provide a two-fold convenience benefit to subscribers," stated Tres Izzard, Buena Vista Datacasting general manager. "The first offers time — no more trips to the video store or return trips to the video store. The second offers savings — no more late fees."

MovieBeam will provide movies "from almost all of the major Hollywood Studios, including Warner Bros., New Line, 20th Century Fox, MGM, Universal, Sony, Disney and sister companies Miramax, Touchstone and Dimension as well as DreamWorks.

The service became available last week in the launch cities of Jacksonville, Fla., Salt Lake City, and Spokane, Wash. Plans are to ramp up to national availability beginning in early 2004, said Izzard.

Buena Vista delivers equipment directly to consumers via two-day FedEx, but it has enlisted a large network of consumer electronics retail chains to provide demonstrations, get the word out on the service and to sign up new subscribers at the point of sale.

Initial retail chains working with MovieBeam include "Best Buy, Circuit City and Sears, in addition to all of the regional consumer electronics chains in our three test markets," said Izzard. "These include Sound Advice, Ultimate Electronics and R.C. Willey, among others. Retailers will be given a commission "competitive with what they make with competitive services," for the sign-up of subscribers at the point of sale, Izzard said.

Consumers can also order the equipment by phone or at www.moviebeam.com.

Subscribers will be asked to pay an equipment-leasing fee of $6.99 per month, and they will be required to pay a viewing fee for each movie they watch.

Pay-per-view fees will be "competitive with the fees for DVD or VHS movie rentals," Izzard said.

New release movies will carry a $3.99 charge, while older films will be $2.49.

Movies will be sent via analog TV channel frequencies with the analog channel.

Although Izzard said each box will be equipped with a DTV tuner to provide a seamless migration path to digital signals once analog services are phased out.

Izzard said the set-top box, which is manufactured for Buena Vista by Samsung, is "very easy to use and set up, and will not require an installation visit." It will be equipped with parental controls to restrict viewing by ratings, and by spending limits. The service is designed for analog NTSC TV sets, and outputs will include S-video and composite connections. Signals will be sent terrestrially to small antenna's attached to each box.

Every week receivers will be updated with the addition of 10 new movies. As space demands, Buena Vista will elect to remove 10 previously stored movies to make room for the new fare.

"There will always be 100 movies consumers can choose from, in sort of a constant carousel coming into the box," Izzard said.